2025 Arkansas Legislation

Hugh McDonald SECRETARY OF COMMERCE AID 1,741,7.74',""` * * 4 Bulletin No. 9-2025 Date: June 12, 2025 Alan McClain COMMISSIONER, ARKANSAS INSURANCE DEPARTMENT To: All Persons Subject to Regulation by the Arkansas Insurance Department and Any Other Persons Interested in Arkansas Insurance Regulation From: Arkansas Insurance Department Subject: 2025 Arkansas Legislation The purpose of this Bulletin is to summarize insurance-related legislation enacted during the 2025 Arkansas Legislative Session. The Department does not represent that this list is complete. It remains your duty to review new legislation. Each recipient is hereby requested immediately to notify all officers, directors, managers, employees, producers, brokers, and adjusters about these new laws. The effective date of all Acts not containing an Emergency Clause or other specified effective or compliance dates is: August 5, 2025 Full texts of Acts can be obtained at the Arkansas State Legislature website: https://arkleg.state.ar.us/ FINANCE Act 261 Amends the Independent Holding Company Regulatory Act (SB236) Includes new standards and requirements related to group capital calculation instructions and NAIC liquidity stress test framework reports. The Act clarifies that a domestic insurer may acquire subsidiaries which may conduct any kind of business authorized by state law. The Act further describes standards and processes related to the Commissioner's authority to disapprove a merger or acquisition of control. Insurers deemed to be in hazardous financial condition may be required to secure and maintain a deposit held by the Commissioner or a bond. 1 Act 349 Sections Two and Three of AID's General Omnibus (HB1595) Section Two requires a foreign reciprocal insurer to file a bond with AID, and Section Three reduces the frequency for examination of hospital and medical service corporations from three to five years. Act 554 Amends Licensing and Regulation of Captive Insurers (SB237) Redefines "association" so that an entity is no longer required to be in existence for at least one year to qualify as an association. The Act also allows the Commissioner to issue a provisional license; modifies unimpaired paid-in capital, dividend requirements, and unimpaired surplus requirements; and allows foreign or alien insurers to become domestic captive insurance companies by complying with applicable requirements. Pure captive insurance companies shall be examined every seven years or when deemed prudent. Pure captive insurance companies may apply for credit against premium tax based upon noncommissioned salaries and wages of Arkansas employees. Establishes penalties for violations. GENERAL OPERATIONS Act 349 Section One and Section Four of AID's General Omnibus (HB1595) Section One repeals the requirement that the plan administrator and personnel of the Arkansas Workers' Compensation Insurance Plan have a physical office within Arkansas. Section Four requires that service of process upon domestic insurers be conducted according to the Arkansas Rules of Civil Procedure. Act 656 Amends the Arkansas Self-Funded Cyber Response Program (HB1666) Amends various provisions of the Arkansas Self-Funded Cyber Response Program. Acts 560 and 779 Creates the State Captive Insurance Program (HB1821 and 5B481) The program will create a captive insurance company to insure the buildings, structures, facilities, and business personal property owned by public schools, state-supported institutions of higher education, and the state. The Act also transfers these insurance programs from the Arkansas Insurance Department via the Arkansas Multi-Agency Insurance Trust to the Department of Transformation and Shared Services. 2 LIFE AND HEALTH Act 136 Amends the Healthcare Contracting Simplification Act (HB1287) Requires a contracting entity that downcodes a healthcare provider's claim to provide notice of the downcoding within 30 days of processing the claim. "Downcoding" is a billing practice in which a healthcare payor changes a provider's billed service on a claim to a lower-cost service. Act 141 Permits Healthcare Providers to Maintain Medical Records in Electronic Format (SB137) Requires an auditor conducting an audit of a healthcare provider on behalf of a health benefit plan to accept an electronic version of medical records instead of physical medical records. Act 142 Regulates Vision Benefit Managers, Amends the Vision Care Plan Act of 2015, and Amends the Healthcare Contracting Simplification Act (HB1353) Expands the definition of health benefit plan to include contracts for providing vision benefits. It also adds several new prohibited practices to the Vision Care Act of 2015. Act 268 Amends the Law regarding Coverage of Examinations for Breast Cancer and Clarifies Cost-Sharing Requirements (HB1309) Clarifies that a health benefit plan shall not impose a cost-sharing requirement for a screening mammogram or breast ultrasound even if a service is provided on a different date or more than one service is provided on the date of service. Act 307 Modifies Payment of Benefits for Certain Healthcare Providers (HB1298) Requires a healthcare insurer to pay an out-of-network claim for any indemnity provided by a health benefit plan for hospital, nursing, medical, or surgical services directly to the healthcare provider that provided the service. Act 310 Act 348 Amends the Any Willing Provider Laws (HB1587) Includes pharmacies within the definition of "healthcare provider." Mandates Coverage for Acquired Brain Injury (HB1583) Requires health benefits plans to provide coverage for medically necessary treatment related to an acquired brain injury. 3 Act 349 Section Five of AID's General Omnibus (HB1595) Repeals the Comprehensive Health Insurance Pool Act, which was preempted by the federal Affordable Care Act. Act 389 Prohibits Prior Authorizations for Treatment of a Mental Health Crisis (HB1275) Prohibits a health insurance plan from requiring a prior authorization for services provided to an individual suffering a mental health crisis. Act 390 Mandates Coverage for Lung Cancer Screenings (HB1316) Requires a health benefit plan to provide coverage for lung cancer screenings and follow-up healthcare services according to the American Cancer Society guidelines. Act 423 Amends the Arkansas Healthcare Consumer Choice Act (HB1288) The Act requires that, once a provider applicant has been approved through an insurer's credentialing process, the insurer must treat a credentialed healthcare provider as a participating provider from the date of submission of a substantially completed application. Act 424 Mandates Coverage for Breast Reconstruction Surgery (SB83) Requires a health benefit plan to provide coverage for all services provided for breast reconstruction surgeries and to cover any surgery determined to be the best course of treatment by a healthcare professional consistent with prevailing medical standards. Also establishes reimbursement rules for compensating out-of-network providers. Act 433 Authorizes a Licensed Psychological Practitioner to Practice Independently (HB1254) Requires a health benefit plan to compensate a licensed psychological practitioner for services provided. Act 434 To Allow Psychology Technicians to be Employed by Psychologists (HB1257) Requires a health benefit plan to reimburse a psychologist for services provided by a technician for the administration and scoring of psychological testing. Act 435 Creates the Community Health Worker Act and Establishes a Certification for Community Health Workers (HB1258) Requires a health benefit plan to compensate a certified community health worker for providing services specified within Act 435. 4 Act 510 Amends the Prior Authorization Transparency Act (HB1300) Requires utilization review entities to publish via website all prior authorization requirements, clinical criteria, and other restrictions in detail and in clear and ordinary terms, including the name of the healthcare service and any associated billing codes. If a prior authorization is not required for a specific service, then the utilization review entity shall disclose any other restrictions. Approved prior authorization requests must be issued for the entire course of treatment and indicate the number of units or visits covering the entire course of treatment. Includes enhanced enforcement provisions for violations of Act 510 and the Prior Authorization Transparency Act. Act 511 Amends the Prior Authorization "Gold Card" Program (HB101) Amends the "gold card program" under which a healthcare provider may qualify for an exemption from a healthcare insurer's or pharmacy benefits manager's prior authorization requirements. Also makes substantial changes regarding exemption from the gold card program for prescription drugs and the appeal process. Act 512 Creates the Arkansas Medical Audit Bill of Rights Act (HB1314) Establishes requirements that payors must follow to conduct a legal audit of a healthcare provider. Act 513 Regulates Step Therapy and Fail First Protocols related to Certain Prescribed Ventilators (HB1321) Mandates coverage for noninvasive ventilators without step therapy or fail first protocols if the ventilator requires frequent or substantial servicing, there is evidence suggesting an alternative treatment required under a step therapy protocol will be less effective, or the ventilator is deemed medically necessary. Act 553 Coverage for Mammograms and Breast Ultrasounds (SB123) Mandates coverage for diagnostic breast exams, exams for breast cancer, and supplemental breast exams without cost-sharing requirements. Act 556 Mandates Coverage for Healthcare Provided in Mobile Units (HB1296) Requires a healthcare insurer to provide coverage for a healthcare service that is provided in a mobile unit, billed by a healthcare provider using the place-of-service code designated for a mobile unit, and would otherwise be covered by the healthcare insurer in another place of service. 5 Act 561 Amends the Law Concerning Mastectomies (HB1859) Amends the Arkansas Health Care Consumer Act to require insurers providing mastectomy benefits to cover biological mesh used to support tissue and nerve grafts. Act 569 Amends the Healthcare Contracting Simplification Act (HB1426) Amends the definition of "health benefit plan" to include third-party administrators and other entities acting on behalf of a self-insured plan. It also describes conditions under which a network provider can opt-out of a carrier's lease or sale of the provider network to another carrier or thirdparty administrator. Act 570 Provides a Drug Reimbursement Process for Certain Healthcare Providers (HB1703) Requires a contracting entity to provide a healthcare provider with a reasonable administrative appeal procedure as described in the Act for challenging drug reimbursement. Act 571 Amends the Arkansas Healthcare Consumer Act to Reduce the Time Allowed for Processing a Provider's Application (HB1788) Requires a healthcare insurer to decide on an application from a provider not licensed under the Arkansas Medical Practices Act within 90 calendar days from the date of submission. Act 626 Amends the Law re Crisis Stabilization Units and Healthcare Insurers (HB1320) Prohibits a health benefit plan from imposing or applying any behavioral or medical management utilization limitations, measures, or controls for a healthcare service provided by a crisis stabilization unit unless the limit is consistent with or equal to limits applied to the same service by Medicaid. Act 627 Mandates Coverage for Breastfeeding and Lactation Consultant Services (HB1333) Requires a health benefit plan to provide coverage for breastfeeding and lactation consultant services in an outpatient setting. Act 628 Mandates Coverage for Severe Obesity Treatments (HB1424) Mandates a health benefit plan to cover medically necessary expenses for the treatment of diseases and conditions caused by severe obesity, including bariatric surgery, revision bariatric surgery, pre-operative care, and post-operative care. It does not require a healthcare insurer to provide coverage for injectable drugs used to lower glucose levels or any other drugs prescribed for weight loss. 6 Act 638 Clarifies the Process of an Adverse Determination Under the Prior Authorization Transparency Act (HB1700) Repeals the requirement that an insurer's adverse determination notice include the name of a reviewing physician. The Act also requires a utilization review entity to provide a clear explanation in ordinary terms of the basis for the adverse determination and provide information the insured can use to make a complaint to the Medical Board, Board of Health, and AID. Act 651 Amends the Law Concerning Disclosures to Policyholders (HB1771) Requires a healthcare insurer to provide a monthly premium, claims, and enrollment report to a policyholder with more than 50 insured employees under a comprehensive group plan within 30 days of the policyholder's request. Act 772 Creates the End Organ and Genomic Harvesting Act (SB311) Prohibits a health benefit plan from providing coverage for organ transplants or post-transplant care if performed in China or any other country known to have participated in forced organ harvesting. Act 836 Amends the Transportation Benefit Manager Act (HB1863) On and after July 1, 2025, the Arkansas Ambulance Association shall collect ground ambulance provider rates that are approved or contracted for between an ambulance provider and a local government entity and submit these rates to the Insurance Commissioner annually. Act 859 Creates the Reproductive Empowerment and Support Through Optimal Restoration Act (HB1142) Requires a healthcare insurer to cover restorative reproductive medicine, which is a scientific approach to reproductive medicine that seeks to cooperate with or restore the normal physiology and anatomy of the human reproductive system without the use of methods that are inherently suppressive, circumventive, or destructive to natural human functions. Act 860 Mandates Coverage for Genetic Testing For an Inherited Gene Mutation for Certain Individuals (HB1079) Requires a health benefit plan to provide coverage for genetic testing for an inherited gene mutation for an individual with a personal or family history of cancer if the genetic testing provides clinical utility, is ordered, or recommended by a healthcare provider, and is supported by medical and scientific evidence. 7 Act 866 Mandates Coverage for Delivery of a Newborn in a Licensed Birthing Center (HB1826) Requires a health benefit plan to provide coverage for delivery of a newborn in a licensed birthing center. Act 867 Amends the Law Concerning Ground Ambulance Services (HB1850) On and after July 1, 2025, in the absence of agreed-upon rates between a provider and a local government entity, the minimum allowable rate of reimbursement both in and out-of-network for ground ambulance providers shall be the lesser of 325% of the Medicare Ambulance Fee Schedule (Arkansas Rural Rate) or the provider's billed charge. Act 958 Amends the Standard Nonforfeiture Law for Life Insurance (SB519) On or after January 1, 2026, an insurer that decides to defer payment of a cash surrender value after demand is made by an insured shall only defer according to these terms: the policy death benefit shall remain in full force and effect until payment is made, and if payment is not made within 45 days after demand is made for surrender of policy, in addition to cash surrender value, the insurer shall pay 8% interest on the cash surrender value on the day that the demand is made for surrender, and accruing from the date of surrender, until the cash surrender value is paid in full. Act 965 Establishes the Certified Community-Based Doula Certification Act (HB1252) Requires a healthcare insurer to compensate a doula for support during a hospital delivery and during the prenatal and postpartum periods as defined through rules established by the Department of Human Services. PHARMACY Act 350 Amends the Arkansas Pharmacy Benefits Manager Licensure Act and the Arkansas Pharmacy Audit Bill of Rights (HB1620) Defines "audit" and "randomly selected." Requires contracts or pharmacy provider manuals to include language indicating that the PBM will transmit payment for a clean claim within 7-14 days of electronic claim submission or 30 days if transmitted by other means. Also requires pharmaceutical manufacturers using a vendor, PBM, or electronic claims processor to process coupons to have an active wholesale distributor permit and to be in good standing with the Arkansas State Pharmacy Board. Both PBMs and pharmaceutical manufacturers shall pay a penalty of 12% per month for late payment of a claim. 8 Act 425 Creates the Pharmacy Nondiscrimination Act (SB103) Amends the Patient Protection Act to include a new statute that prohibits a PBM from denying a pharmacy the opportunity to participate in the PBM's network if the pharmacy has an Arkansas license and agrees to accept "relevant and reasonable terms of participation." Act 514 Amends the Arkansas Pharmacy Benefits Manager Licensure Act (SB104) Adds a statute that defines and prohibits "unfair and deceptive acts or practices." Such acts or practices will be considered a violation of the state Deceptive Trade Practices Act, which is enforced by the Attorney General. The Act adds a new subdivision prohibiting ghost networks and carve-out networks. Requires a payor and a PBM to maintain compliance in all dispensing practices, including federal and state laws related to medical dispensing and chain of custody. Act 633 Amends the Arkansas Pharmacy Benefits Manager Licensure Act (HB1602) Amends PBMLA to include definitions of "clean pharmacy claim," "pharmacy claims BIN," "pharmacy claims group number," "pharmacy claims processor control number," and "unique combination for pharmacy claims." The Act modifies licensing requirements so that the initial and renewal application fee for a PBM license will be $20,000. Act 773 Establishes the Pharmacy Services Administrative Organizations Act (SB475) Requires AID to establish a program regulating Pharmacy Services Administrative Organizations ("PSAOs"). In the event of a dispute between a pharmacy and PBM, PSAOs will be required to facilitate timely communication from the pharmacy to the PBM or third-party payer. Act 775 Amends the Arkansas Pharmacy Benefits Manager Licensure Act (SB544) Requires a PBM to provide a requesting PSAO or pharmacy with described information to support informed healthcare contracting decisions. The Act requires any opt-out option in an opt-out contract offered to a PSAO, pharmacy, or pharmacist to include specific notice provisions and prohibits a PBM from using a national contract for Arkansas pharmacies that does not include a separate Arkansas-based amendment or Arkansas specific contract. The Act mandates that underpayments to pharmacies are subject to 12% interest per month. Violations of the PBMLA may now result in a PBM being prohibited from bidding on any contract using state funds for three years. 9 Act 990 Amends the Maximum Allowable Cost Law (SB583) Allows a pharmacist a private right of action under the Deceptive Trade Practice Act, the Pharmacy Benefits Manager Licensure Act, and the Trade Practices Act. PROPERTY AND CASUALTY Act 22 Amends the Law Concerning Standards for Insurance Policies (SB70) Applies to commercial property and casualty policies. When an insurer increases the premium rate equal to or greater than 25% on a renewal policy, the agent must receive 60 days' notice. Previously 30 days' notice of the rate increase was required to be given to the agent. The insured must now be given 30 days' notice of an increase in premium equal to or greater than 25% on a renewal policy; the previous required notice timeframe to the insured was 10 days. Act 23 Clarifies Fees Collected by Certain Brokers (SB76) Removes the 20% statutory cap on fees (Ark. Code Ann. § 23-66-310(c)) when the risk is referred to a surplus lines broker. Act 29 Regarding Lien Priority of a Purchase Money Mortgage (HB1273) Gives lien priority to a purchase money mortgage over a certificate of indebtedness issued by the Secretary of the Department of Finance and Administration. Act 246 Amends the Law Concerning Disclosure of Deductibles Under Certain Insurance Policies (SB48) Pertains to owner-occupied residential property insurance and requires insurers to disclose all deductibles on the policy declaration page or on the notice of renewal of the policy. Act 345 Amends the Law Concerning Surplus Lines Insurance (SB276) Clarifies that proof of insurance required to meet motor vehicle financial responsibility can be issued from either admitted insurers or insurers in the excess and surplus lines market. Act 346 Amends the Arkansas Title Insurance Act (HB1367) Requires city, county and state governments that maintain electronic copies of real estate records through a third party to provide records to title agents and title agencies in electronic format and without any watermarks or notations that do not appear in the original records. The Act also provides for a maximum fee of $150 per month. The Act further requires a city, county and state government that does not maintain records in electronic 10 form to provide a reproduction of the records to title agents and title agencies. Act 418 Amends the Law Concerning Scrivener's Affidavits (HB1479) Amends real property provisions to add two additional classes of persons who may file scrivener's affidavits. These additional classes include a licensed engineer or surveyor who prepared the original plat, replat, lot split, boundary line adjustment, or other instrument that affects or is related to the title to real property; and a notary public who witnessed the execution of an original instrument and executed an acknowledgement to the original instrument that contains an error. Act 426 Creates the Online Marketplace Guarantees Act (SB329) Provides a regulatory framework within which an online marketplace and its affiliates may offer or sell an online guarantee. Act 427 Creates the Strengthen Arkansas Homes Act (SB366) Creates a program through which Arkansas consumers may apply for grants to fortify their owner-occupied residences against damage from catastrophic wind events and hail. Act 479 Amends the Law Concerning Mechanic's and Materialmen's Liens (HB1271) Amends real property provisions to clarify lien priority between a mortgage construction loan, mechanics' liens, and materialmen's liens. Act 520 Amends the Law Concerning Property Vacated by a Municipality (HB1272) Amends local government provisions by clarifying what property conveys in the future when a municipality has abandoned property such that the abutting landowners have taken title to the property. The Act also is retroactive to all streets and alleys abandoned by a city or town with real estate abutting the streets and alleys after February 6, 1945. Act 521 Amends the Law Concerning Payment of Real Property Taxes by Title Licensees (HB1274) Allows title agents and title agencies to pay delinquent personal property taxes in conjunction with a closing on real property. Act 752 Requires a County Recorder to Verify Certain Information Before Recording a Deed to Real Property (5B406) Requires a recorder of real estate deeds, when presented in person with a deed for recording, to request to see a valid photo identification or a driver's 11 license from the grantor or from an individual signing the deed on behalf of a grantor. When recording by mail, the grantor is required to include a photocopy of his or her valid photo identification or a driver's license along with the deed. A valid photo identification or a driver's license is not required when the person filing the deed is an attorney, real estate broker or agent, a representative of a financial institution, a person affiliated with a title agency or a title agent, the Commissioner of State Lands, an individual representing the state or a political subdivision thereof, or the state, a municipality within the state, a county within the state, or a political subdivision of the state. Act 974 Amends the Law Concerning Insurance Requirements for Home Inspectors (HB1625) Clarifies the type of insurance that home inspectors are expected to carry (a professional liability insurance policy or an errors and omissions insurance policy approved by AID) for home inspections performed by the home inspector. The minimum limit of $100,000 remains unchanged. ALAN MCCLAIN INSURANCE COMMISSIONER STATE OF ARKANSAS 12 DATE